Miles Lewis in Barron’s on Why a Royce Holding Is more than a One-Trick Pony
article 08-09-2022

Miles Lewis in Barron’s on Why a Royce Holding Is more than a One-Trick Pony

Can small-cap stocks maintain their current strong performance streak? Miles Lewis discusses one holding that could.

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PM Miles Lewis was recently featured in the Barron’s piece, “Smaller Stocks Have Been Big Winners: Why Their Streak Can Continue” penned by Jacob Sonenshine, that looked at how small-cap stocks may be poised for outperformance after being hit harder in the current downturn.

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The article describes how smaller companies are hurt more than large-caps by a slowing economy, but that a rebounding economy—as well as a slower pace of interest rate increases—should be good news for many small-cap stocks.

Miles was asked to offer an example of a company with the potential for strong earnings growth and sufficient profitability to not need to raise capital if the economy stalls or contracts. He discussed Yeti Holdings (Nasdaq: YETI) as a business that is growing successfully and, contrary to some views, does more than make high-end coolers. It’s added new products to an already diverse line and thus, in Miles’s view, is more than a one-trick pony.

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Learn more about Miles Lewis.

Important Disclosure Information

Average Annual Total Returns as of 6/30/22 (%) 

  2Q221 1YR 3YR 5YR 10YR 15YR 20YR Since
Incept./45YR
Date
Small-Cap Total Return -13.63 -9.32 6.49 6.15 9.11 6.21 8.10 9.99 12/15/93
Pennsylvania Mutual -13.34 -17.56 5.61 6.81 9.22 6.23 8.59 12.38 N/A
Russell 2000 Value -15.28 -16.28 6.18 4.89 9.05 5.58 7.77 10.07 N/A
Russell 2000 -17.20 -25.20 4.21 5.17 9.35 6.33 8.17 9.09 N/A

Annual Operating Expenses: Royce Pennsylvania Mutual: 0.92. Royce Small-Cap Total Return: 1.25

1 Not annualized.

All performance information reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when redeemed. Shares redeemed within 30 days of purchase may be subject to a 1% redemption fee, payable to the Fund which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained at www.royceinvest.com. Operating expenses reflect each Fund's total annual operating expenses for the Investment Class as of each Fund's most current prospectus and include management fees and other expenses.

Mr. Lewis’s thoughts and opinions concerning the stock market are solely their own and, of course, there can be no assurance with regard to future market movements. No assurance can be given that the past performance trends as outlined above will continue in the future.

The performance data and trends outlined in this presentation are presented for illustrative purposes only. Past performance is no guarantee of future results. Historical market trends are not necessarily indicative of future market movements.

Percentage of Fund Holdings As of 6/30/2022 (%)

  Yeti
Holdings

Royce Small-Cap Total Return

0.4

Royce Pennsylvania Mutual

0.1

Company examples are for illustrative purposes only. This does not constitute a recommendation to buy or sell any stock. There can be no assurance that the securities mentioned in this piece will be included in any Fund’s portfolio in the future.

Company examples are for illustrative purposes only. This does not constitute a recommendation to buy or sell any stock. There can be no assurance that the securities mentioned in this piece will be included in any Fund’s portfolio in the future.

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and / or Russell ratings or underlying data and no party may rely on any Russell Indexes and / or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. The Russell 2000 is an unmanaged, capitalization-weighted index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 index. The Russell 2000 Value and Growth indexes consist of the respective value and growth stocks within the Russell 2000 as determined by Russell Investments. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. Smaller-cap stocks may involve considerably more risk than larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.)

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